A. Balanced Development of the Regions
578. Uneven and unbalanced regional development is a significant factor contributing to the spread of poverty throughout the Republic. Uneven development of the regions reflects geographic characteristics and differences in production infrastructure, as well as limited access to resources and communication and information services. The existing structure and system for collection and accumulation of tax revenue leads to subsidization of six out of eight regions of the Republic. Inefficient use of local budget resources leads to arrears in the payment of salaries and social payments.
579. A system of special equalization and categorized grants is allocated from the national budget to regions in order to ensure even distribution of social payments. Various forms of compensation and subsidies are provided to the population living in mountainous and remote areas. Much work is being undertaken with the assistance of the World Bank, Asian Development Bank, and other international agencies and donor countries on development of local self-government, capacity building of rural NGOs, rehabilitation and construction of irrigation and water systems, as well as reconstruction and equipping of schools and hospitals. Medium-term regional and town development programs prepared by the Government and local authorities have been undertaken without much success due to the lack of adequate funding.
580. The situation in small towns and town centers is aggravated by the closure of large enterprises that once provided employment to local communities. Unemployment has forced many residents to migrate, while lack of funds in local budgets does not permit proper maintenance of infrastructure in these localities. Strong growth of agriculture has somewhat lessened the spread of poverty in rural areas. Nevertheless, poverty in rural areas remains higher than in urban areas. Rural residents still lack adequate access to medical assistance, financial services, communications and information.
581. Reducing the development gaps in the country’s regions and bringing down the poverty level in the most backward regions are key areas of the Government’s regional policy. Further refinement of the legal framework to stimulate the system of local self-government and budget decentralization will create the necessary conditions for greater use of NGO and community potential in resolution of regional issues. Thus, the UNDP Decentralization and Poverty Alleviation Program will gain greater significance with its objectives of building the capacity of communities through effective use of internal and external resources, active participation in decision-making and implementation and strengthening of the confidence of the poor in their capabilities.
582. Socio-economic programs for comprehensive development of villages, towns, mountainous and remote areas to be developed during 2002-2003 under the NPRS program, will take into account the existing potential and specifics of each region. During the formation of these programs, special attention will be paid to their feasibility, financial soundness, effective use of local resources, development of cooperatives and consistency with sectoral development programs. The highest priority in investment policy and PIP will be given to projects oriented on the creation of jobs, rehabilitation and construction of irrigation and water supply systems, processing of agricultural produce, as well as expansion of educational, health, and financial services. Micro-financing, well-developed private enterprise and social mobilization should significantly contribute to a higher employment levels.
583. Implementation of the regional stabilization policy is expected to result in a 5 percent rate of economic growth, while development policy will ensure a growth rate of 7 percent. Economic growth and measures for increased employment will lead to reduction of unemployment and higher incomes. Together with active promotion of social mobilization, such measures will reduce poverty. Expansion of foreign economic ties and reduced trade barriers will promote exports. Rehabilitation and construction of water facilities will improve accessibility to clean water and prevent disease. Construction and upgrading of schools and a better supply of textbooks and computer classes will increase access to education and improve the quality of educational services. Increased budget revenue, streamlined benefits, and improved targeting will help the State to provide needy families and citizens with adequate social support.